Life insurances in Spain - the simple truth.

 ¨In this world nothing can be said to be certain, except "death and taxes¨

I think most people have heard that phrase, and knowing that death is certain, few people make plans for it.  Yet we make extraordinary plans for our homes, weddings, children, retirements and financial planning, to name a few.

Ok, we don’t want to plan our actual death, but we should consider what will happen if we were to die suddenly, at a young age or preferably when we have had an extensive and hopefully, happy life. Very few do plan for their deaths until the time draws near or they are considerably ill.

At a young age, providing for your family in the event of your own death is a very simple and easy process,  premiums are very cheap and the cover is excellent.

Life insurance or life assurance as it was originally known because it was something they could guarantee would happen one day - is one of the few insurance products that do get more expensive with age. Premiums are primarily age related, although having any kind of medical condition can add considerably to your premium – which is why having a good life insurance policy now, whilst you are young and fit, is the best option.

But we are not all young and fit, and finding life insurance in Spain to protect our families once we are over 65 or retired, can be quite a simple job – just CONTACT US.

The benefits.

Peace of mind at first, knowing that your family will receive a cash benefit, free of tax - if planned correctly, shortly after your death. Consult our life insurance specialists for free financial planning and/or life insurance advise on 0034 965275727. This FREE service is strictly private and confidential.

Life insurance can help you mitigate inheritance and other taxes that your family may incur at the time of your death and of course, there is ¨Funeral Planning¨ to consider. 

Money to bury you in the way you have requested – a simple cremation or an all out bash with all your mates flying in to bid you farewell. That choice is yours - with an adequate life insurance your family will not have to wait for probate to receive the money and with the immediate payment of enough money for your initial funeral costs released within hours of production of your death certificate, things couldn’t get much easier for your family.

Money no object. If you have plenty of money and want to give it to the tax office once you have passed away, no one is going to object, certainly not the Tax office, but your inheritors may. Taking a bit of time to sort out your life insurance is a simple, easy task and we will be happy to provide you with Free specialist advise on the right life insurance cover to use and how to structure it to provide the best for your inheritors.

The 3 basic types of life insurance.

Term life insurance. 

As this name suggests, this is life insurance that will cover you for a specific period – in years. Term life insurance for up to 10 years can be provided for a fixed premium so that you know exactly how much you will pay for your life insurance and for how long. Payments can usually be made monthly or annually.  These policies can be renewed at the end of the ten years but will have a significant increase in premiums due to you being 10 years older.

If you don’t continue the premiums on these you will not get ANY refunds and the same applies when the policy term expires. They are insuring your life for a specific period – if you don’t pass away during the period of insurance, you cannot make a claim on it.

Whole of life.

This is Life insurance for the rest of your life – as long as you keep paying the premiums. Often these can also be quite flexible by allowing you to increase cover for additional premiums and often contain an element of life investments to them so that if you decide after a few years that you don’t want to pay the premiums any more, then you will get something back. Over time these can be worth quite a lot of money, provided that the investment part of the life insurance is a good one. You can cash these in at any time if they have a surrender value.

The beauty of a whole of life insurance policy is that you know you will be covered until the day you die, no matter how long you live, whereas other life insurance products are restricted to age and in Spain, the capped age for contracting life insurance varies between 70 and 80 years of age.

Mortgage & loan protection.

This is probably one of the main reasons that people take out life insurance in Spain. It’s not to protect you or your family, but to protect the assets owned by the bank – your property.

Be VERY AWARE that Bank Life insurance policies tend to be heavily loaded (expensive) and in recent years in Spain the Spanish banks have tried to capitalise on this, as well as your house insurance, by making it a condition of supplying you with a mortgage.

Failure to use the Bank’s insurances, or trying to cancel them after a year, can lead to them increasing your mortgage rate by as much as by 0.5% interest on each. (ref. Bankinter) So check your mortgage details BEFORE you sign them. Under Spanish law- forcing you to buy their insurance products as a condition of your mortgage is NOT legal.

Don’t take the word of any mortgage consultant you use, they are on the commission trail from the bank for all products they can get you to sign up for, so check the details, ask for a translation when you are about to sign for the mortgage at the Notary.

We did some calculations on the differences between Bankinter insurances and our own and found that even by cancelling the bank insurance policies and paying the extra 0.5% interest over a mortgage term of 15 years, (based on 2017 figures) we still saved a lot of money.

Life insurances policies can be assigned to the bank to prove that the mortgage is covered and any additional amount can be assigned to your Spouse and family.

For more information on life insurance, funeral planning and/or inheritance tax planning, please contact us.

Our Life insurance & Financial Planning Services are completely Free of charge and all interviews and conversations are held in the strictest confidence.

Copyright February 2108 www.insuranceinspain.com